Eric Bjornholt
MICROCHIP TECHNOLOGYAbout Eric Bjornholt
J. Eric Bjornholt is Senior Vice President and Chief Financial Officer of Microchip Technology, serving as CFO since January 2009 after joining the company in 1995; he is 54 years old and holds a Master’s in Taxation (Arizona State University) and a B.S. in Accounting (University of Arizona) . Company performance context: Microchip reported FY2025 net sales of $4.40 billion , non-GAAP operating income of $1,078.0 million (24.5% margin) , and a TSR index value of 155.82 for FY2025 in the SEC’s pay-versus-performance disclosure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Microchip Technology | Chief Financial Officer | Jan 2009–present | Long-tenured finance leadership through cycles and incentive program alignment |
| Microchip Technology | Vice President, Finance | 2008–Jan 2009 | Progression to CFO; built finance capabilities |
| Microchip Technology | Various financial management roles | 1995–2008 | Continuity in finance operations and controls |
| Microchip Technology | Senior Vice President | 2019–present | Elevated executive responsibilities |
External Roles
- None disclosed in company filings .
Fixed Compensation
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Base Salary ($) | 315,212 | 324,351 | 264,195 |
| MICP Target Bonus (% of Salary) | — | 44% | 44% |
| MICP Actual Payout ($) | 378,797 | 117,118 | 0 (no payout all quarters) |
| ECBP Bonus ($) | 36,894 | 10,161 | 0 |
| Salary Reduction Program Note | — | 20% reduction began Feb 2024 | 20% reduction continued until Mar 31, 2025 |
Performance Compensation
Microchip’s Management Incentive Compensation Plan (MICP) uses quarterly targets with defined weightings; no FY2025 payouts were made to executives due to performance shortfalls.
| Metric / Weighting | Q1 FY2025 Target & Weight | Q2 FY2025 Target & Weight | Q3 FY2025 Target & Weight | Q4 FY2025 Target & Weight |
|---|---|---|---|---|
| Sequential net sales growth | 1.50% (20%) | 3.50% (20%) | 3.50% (20%) | 3.50% (20%) |
| Non-GAAP gross profit % | 65.50% (15%) | 63.50% (15%) | 63.50% (15%) | 63.50% (15%) |
| Non-GAAP opex % of net sales | 23.00% (15%) | 25.50% (15%) | 25.50% (15%) | 25.50% (15%) |
| Non-GAAP op. income % of net sales | 42.50% (15%) | 38.00% (15%) | 38.00% (15%) | 38.00% (15%) |
| Non-GAAP diluted EPS | $0.52 (15%) | $0.43 (15%) | $0.30 (15%) | $0.10 (15%) |
| Discretionary (non-ESG) | N/A (15%) | N/A (15%) | N/A (15%) | N/A (20%) |
| Discretionary (ESG) | N/A (5%) | N/A (5%) | N/A (5%) | N/A (0%) |
| MICP Total | 100% | 100% | 100% | 100% |
| Actual Results / Payout | Q1 FY2025 Actual & Payout | Q2 FY2025 Actual & Payout | Q3 FY2025 Actual & Payout | Q4 FY2025 Actual & Payout |
|---|---|---|---|---|
| Sequential net sales growth | -6.37% (0%) | -6.24% (0%) | -11.84% (0%) | -5.41% (0%) |
| Non-GAAP gross profit % | 59.90% (0%) | 59.54% (0%) | 55.44% (0%) | 51.99% (0%) |
| Non-GAAP opex % of net sales | 28.43% (0%) | 30.25% (0%) | 34.91% (0%) | 37.97% (0%) |
| Non-GAAP op. income % of net sales | 31.46% (0%) | 29.29% (0%) | 20.53% (0%) | 14.02% (0%) |
| Non-GAAP diluted EPS | $0.53 (0%) | $0.46 (0%) | $0.20 (0%) | $0.11 (0%) |
| Discretionary (non-ESG) | 0% | 0% | 0% | 0% |
| Discretionary (ESG) | 0% | 0% | 0% | 0% |
| MICP Total | 0% | 0% | 0% | 0% |
Equity awards: since October 2021, 50% of evergreen RSUs are PSUs tied to 12-quarter non-GAAP operating income as a % of net sales; remaining 50% are time-based RSUs (~4-year vest) . No option grants since September 2015 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 39,659 shares; includes 5,346 RSUs vesting within 60 days of June 20, 2025; flagged as less than 1% of outstanding shares (539,674,554) |
| Stock ownership guidelines | Section 16(b) executive officers: minimum 2× annual salary or 12,000 shares; all executives and directors were in compliance in FY2025 |
| Anti-hedging/pledging | Company insider trading policy prohibits hedging, short sales, options trading, and pledging or margin holdings of Microchip securities |
| Options | No stock options outstanding or granted (companywide) as of FY2025 |
Selected outstanding awards and scheduled vesting (market value at $48.41/share):
| Vest Date | Shares | Market Value ($) |
|---|---|---|
| Feb 15, 2026 | 1,349 | 65,305 |
| Feb 16, 2026 | 678; 93 | 32,822; 4,502 |
| May 15, 2026 | 1,690; 183 | 81,813; 8,859 |
| Aug 15, 2026 | 252 | 12,199 |
| Aug 17, 2026 | 2,226 | 107,761 |
| Nov 15, 2026 | 296 | 14,329 |
| Nov 16, 2026 | 2,945 | 142,567 |
| Feb 15, 2027 | 2,713 | 131,336 |
| May 17, 2027 | 2,380 | 115,216 |
| Aug 15, 2027 | 2,226 | 107,761 |
| Nov 15, 2027 | 2,512 | 121,606 |
| Feb 15, 2028 | 2,274 | 110,084 |
| May 15, 2028 | 2,194 | 106,212 |
| Aug 15, 2028 | 2,149 | 104,033 |
| Nov 15, 2028 | 2,540 | 122,961 |
| Feb 15, 2029 | 3,461 | 167,547 |
Note: PSU achievement levels vary by grant cohort; FY2025 disclosures indicate some cohorts at 100–200% of target based on performance status as of March 31, 2025 (see footnotes for vesting contingencies and performance periods) .
Employment Terms
| Provision | Terms (CFO) |
|---|---|
| Employment contract | No employment contract; no severance outside change-of-control agreements |
| Change-of-control period | 3 months prior to CoC through 2 years post-CoC |
| Trigger type | Double trigger: termination without cause (or resignation for good reason) during CoC period |
| Cash severance | 18 months base salary (then-current) |
| Bonus severance | 150% of highest annual incentive compensation paid in any of preceding 3 full plan years |
| Benefits | Lump sum for 18 months COBRA premiums (medical, vision, dental) for executive + dependents |
| Equity vesting | 100% acceleration for service-based awards; performance-based awards vest at greater of target or per award terms |
| 280G excise tax | No gross-up; cutback to avoid excise tax if economically optimal; waterfall ordering defined |
| Clawback | Compensation recovery (Nasdaq-compliant) adopted October 2023 for incentive-based compensation upon restatement |
| Minimum vesting | Equity plan requires ≥1-year vesting for ≥95% of awards (limited exceptions) |
| Deferred comp | Aggregate balance $708,302; aggregate earnings FY2025 $28,545; no company contributions |
| Perquisites | 401(k) match $3,963; life insurance premiums $2,174 (FY2025) |
Performance & Track Record
- Pay-versus-performance: FY2025 CAP (compensation actually paid) to non-PEO NEOs averaged -$1.46 million reflecting negative fair value changes in unvested equity amid downturn; Microchip TSR index 155.82 vs peer index 301.01 in FY2025 disclosure .
- FY2025 operating context: Non-GAAP operating income $1,078.0 million; GAAP operating income $296.3 million; non-GAAP net income $708.8 million . No MICP payouts in FY2025, consistent with weak results .
- Governance feedback: 94.22% Say-on-Pay support at August 20, 2024 meeting .
Compensation Structure Analysis
- Equity-heavy incentives: Quarterly evergreen awards split roughly 50% PSUs (operating margin-based) and 50% time-based RSUs, increasing at-risk pay tied to profitability targets .
- Cash incentives shut off: FY2025 MICP paid 0% in all quarters, demonstrating strict pay-for-performance alignment during downturn .
- Risk controls tightened: Adoption of clawback (Oct 2023), minimum vesting, and removal of excise-tax gross-up in new CoC agreements (June 2024) .
Equity Ownership & Alignment (Expanded)
| Indicator | Assessment |
|---|---|
| Skin in the game | 39,659 shares beneficially owned; RSUs vesting in 60 days included; below 1% of outstanding shares |
| Ownership guideline compliance | Executives were compliant in FY2025; CFO guideline is 2× salary or 12,000 shares |
| Hedging/pledging risk | Prohibited by policy (anti-hedging and anti-pledging) |
| Option risk | No options outstanding/granted; reduces leverage/volatility |
| Upcoming vesting cadence | Multiple RSU/PSU tranches vest across 2026–2029; may create periodic tax-driven selling windows |
Investment Implications
- Alignment: The zero cash bonus outcome in FY2025 and PSU linkage to non-GAAP operating margin indicate strong pay-for-performance discipline; equity-heavy mix supports retention and long-term focus .
- Retention/pressure: A layered vesting schedule through 2029 suggests ongoing retention hooks; however, periodic vesting may lead to incremental selling pressure around vest dates for tax/liquidity, mitigated by anti-hedging/pledging policies .
- Governance quality: Clawback, minimum vesting, and excise-tax cutback provisions are shareholder-friendly; strong say-on-pay support (94.22%) reduces governance risk .
- Performance sensitivity: FY2025 MICP structure weighted to margins and EPS was stringent in downturn; forward PSU payouts depend on sustained recovery in operating margin per disclosed matrices, making equity realization sensitive to execution on cost, mix, and demand normalization .